China’s position in the Bitcoin industry is a confusing and convoluted one. The country has essentially banned Bitcoin since 2017, but has gone ahead with the growth of blockchain in a big way. Still, the reports are that most of the creation of new Bitcoin originated in China.
Bitcoin mining, still such an integral and important aspect of the industry, is allegedly taking place predominantly in China. According to a CoinShares report, on Reuters, China is responsible for 65 percent of total Bitcoin mining, and 54 percent of that happens in Sichuan province alone.
This news, despite it being surprising, taking into consideration the viewpoint of China in regards to Bitcoin, is positive as it shows that the country is still a vital cog in the industry. More so, it also shows that Bitcoin’s energy consumption, despite concerns, is aimed at sustainable energy – in this case, hydroelectric.
The report states that miners in China control 66 percent of global hashrate, a measure of the power of computing power on the Bitcoin network that dictates the ability to produce new coins. This is a substantial figure, but it is also one that is growing.
In June, the same measures saw China’s dominance over the mining sector sitting at 60 percent, but, since then, a lot has happened in China with regards to blockchain especially, as well as cryptocurrency.
China’s president has doubled down on the importance of blockchain for the nation, stating that they will be putting a lot of time and effort into it. Although this spilled out as a boost for cryptocurrency, that was soon shut down.
Yet, the mining side of things continues to be profitable and applicable for Bitcoin as electricity in China is cheap and readily available, and with Sicheuan a key mining area, it spells out that renewable energy is at the forefront.
China’s crackdown on cryptocurrency is still very applicable, and yet, it is allowing mining to continue to prosper, which is unusual. However, mining and the creation of new cryptocurrency does not cause China too many issues as its bans on the digital assets is enough to maintain capital control.
So, for miners to create new coins in China means that they will soon have to move them away from the mainland, and that, for the government, is not as damaging or as pressing as a thriving Bitocin ecosystem within China.